As a renter, securing a lease can be a challenge, especially if you’re a non-US citizen or have a history of eviction. However, with the help of a third-party guarantor, the process can be made simpler. In this article, we’ll explore what a third-party guarantor is, their benefits, how they work, and what’s needed to obtain their services.
What is a Third-Party Guarantor?
A third-party guarantor is a company that acts as a co-signer on a lease agreement between a landlord and a tenant. Their purpose is to provide additional security for landlords, ensuring that they will receive rent payments even if the tenant defaults. Third-party guarantors also offer deposit replacement services that can eliminate the need for tenants to put down cash security deposits.
Two Goals of Third-Party Guarantors
Third-party guarantors provide two primary services: lease guarantees and deposit replacements.
Lease Guarantee
A lease guarantee is an agreement between the landlord, the tenant, and the third-party guarantor. It covers rent payment default and vacancy loss for landlords. If a tenant defaults on their rent, the third-party guarantor will cover the cost for up to 6 to 12 months. Some third-party guarantors offer full coverage for up to 11 months.
Deposit Replacement
Deposit replacement is a service that can eliminate cash security deposits. Instead of paying a cash deposit, tenants can pay a one-time fee to the third-party guarantor. If there are damages to the apartment or legal fees, the third-party guarantor will cover the costs.
Advanced Details of Third-Party Guarantors
Surety Bond
Some landlords only do lease guarantees and not deposit replacement. For these landlords, the third-party guarantor provides a surety bond on their behalf. The bond ensures that the landlord will be compensated if the tenant defaults on their rent.
Acceptable Credit Score
Most applicants can get a bond from a third-party guarantor. However, third-party guarantors reject clients if they have a history of eviction. The lowest credit score that TheGuarantors will accept is 550.
Ideal Clients for Third-Party Guarantors
Third-party guarantors cater to several types of clients, including corporate leases, students, non-US citizens, recent graduates, and self-employed individuals. These individuals may have difficulty securing a lease due to their credit history, citizenship status, or income source.
Costs to Client/Tenant
The cost of third-party guarantor services is determined by the tenant’s risk profile. Lease guarantees typically cost between 60-90% of a month’s rent, while security deposit replacement costs between 5-15% of a month’s rent.
What’s Needed for International Applicants?
International applicants need to provide a verified passport to obtain third-party guarantor services. This ensures that they are legally allowed to rent in the United States.
Conclusion
Third-party guarantors provide an essential service for individuals who may have difficulty securing a lease. They offer lease guarantees and deposit replacements, ensuring that landlords receive their rent payments and tenants don’t have to pay cash security deposits. TheGuarantors is one company that offers these services, and they have specific requirements for credit scores and eviction histories. International applicants must provide a verified passport to obtain their services. Overall, third-party guarantors are an excellent option for individuals who need additional security when renting an apartment.
FAQs
- Is a third-party guarantor required for all rental leases?
No, not all landlords require a third-party guarantor. However, they may be necessary for individuals who have a poor credit history or are non-US citizens.
- Can a third-party guarantor cover all costs related to a lease?
No, third-party guarantors only cover specific costs related to a lease. For lease guarantees, they cover rent payment default and vacancy loss for landlords. For deposit replacements, they cover apartment damages and legal fees.
- Are third-party guarantors expensive?
The cost of third-party guarantor services is determined by the tenant’s risk profile. Lease guarantees typically cost between 60-90% of a month’s rent, while security deposit replacement costs between 5-15% of a month’s rent.
- Can international students use third-party guarantors?
Yes, third-party guarantors are an excellent option for international students who may have difficulty securing a lease due to their citizenship status.
- Can a tenant use a third-party guarantor for a short-term lease?
Yes, third-party guarantors offer services for both short-term and long-term leases. They typically provide coverage for up to 6 to 12 months, depending on the agreement with the landlord.
In conclusion, third-party guarantors offer an excellent option for individuals who may have difficulty securing a lease due to their credit history, citizenship status, or income source. They provide lease guarantees and deposit replacements, ensuring that landlords receive their rent payments and tenants don’t have to pay cash security deposits. With their services, tenants can secure their dream apartment without worrying about the additional costs and risks associated with renting.
